1. Create a search profile
Have you not found a business yet? Create a search profile for yourself. In a search profile, you describe what kind of business you want to take over. By setting up some criteria, you get more focus. For example, what are you good at? What challenges do you want to overcome? Which region are you considering? And how much money do you have available for the takeover?
2. Ask for advice when taking over a business
Taking over a business is a complicated process. For example, you must sign a purchase contract and the value of the business must be calculated. That is why guidance during the business takeover is sensible. The Netherlands Chamber of Commerce (KVK) advises about business takeovers (in Dutch).
3. Look for a business takeover offer
Look for a business that fits you according to your search profile and approach the owners. KVK gives tips for finding and buying a business.
4. Ask for the memorandum of sale
With a memorandum of sale you gain insight into the business and the value of the business. The memorandum of sale includes the history of the business, organisational structure, and financial situation.
5. Sign a confidentiality statement
The seller has to give you confidential information about their business. Because this information is only for you, they will ask you to sign a confidentiality statement. A confidentiality statement is also called a non-disclosure agreement (NDA).
6. Calculate the value of the business
The value of your business is calculated based on concrete assets. But also goodwill influences the value of a business. There are several ways to do a company valuation. You can use the balance sheet, current profit, or the goodwill. But whatever the asking price may be, the actual price is always determined after negotiation.
7. Record the agreements in a declaration of intent
Record agreements that you make during business takeover negotiations in a declaration of intent. Keep in mind that the agreements in a declaration of intent are binding for you and the seller.
8. Do your due diligence
You are obligated to check if the information the seller gave you is correct. A common way to do so, is due diligence. A consultant or accountant can help you with this.
Meaning of ‘due diligence’
Due diligence means investigating the administration of a business. Due diligence is often used to check information. An entrepreneur who takes over a business is obligated to check if the information on the business is correct. And the seller needs to share important information. A consultant can help with this.
9. What you do and don’t take over
You should discuss the following topics during negotiations:
- Business premises. Do you want to take over the business premises? Look if it is possible to take over the leasing contract with substitution (in Dutch).
- Intellectual property
- Product liability and granted guarantees
- Ongoing contracts, for example with suppliers and clients
- Phone numbers and email addresses of the business
- Ongoing subscriptions, such as on phones, internet, and window cleaners
- Customer data
- Pending lawsuits
- Credits and debts
You have to take over staff
Taking over a business automatically means taking over the staff. You cannot change anything about their rights and obligations. And you have to inform the Dutch Tax and Customs Administration (Belastingdienst) that you will take over the staff. The previous owner stays jointly responsible with you for honouring their part of the employment contract for 1 year.
Read more about staff and business takeover.
10. Draw up a purchase agreement
Is the sale almost complete? Then you can draw up a purchase agreement together with the seller. You use the declaration of intent (step 7) as a basis. For example, you can include an annulment clause in the purchase agreement.
11. A new owner, a new KVK number
If you are purchasing a sole proprietorship (eenmanszaak) or a general partnership (vennootschap onder firma, vof), the business will get a new KVK number. For this, make an appointment at KVK (in Dutch) to register your new business in the Business Register. KVK will pass on your data to the Tax Administration. You do not need to register with them. When the Tax Administration registers you as an entrepreneur in their administration, you get your VAT-ID and the VAT number.
How to take over a private limited company (besloten vennootschap, bv)
You can take over a bv in 2 ways:
Takeover of shares
The capital of a bv is divided among shares. Are you taking over a bv? Then the shares are passed on to you. For this, you need a notarial deed. This ensures that everything that belongs to the business is passed on to you.
Assets and liabilities transaction
With this method, you can decide together with the seller what you take over. You do not take over their shares, but choose how to continue the business on your own terms. This is comparable to taking over an eenmanszaak or a vof.
12. Financing your business takeover
When you take over a business, you can use your own money. You can also finance the business takeover with other financing options. For example, a subordinated loan with the seller or lessor. With these forms of financing, the seller often stays involved with the business for a period of time. Make clear agreements about financing to prevent trouble afterwards.
13. Do not pay VAT on the sales price
All VAT arrangements that apply to the business, pass on (in Dutch) to you. They are not person-related, but related to the business. That is why the seller cannot add VAT to the selling price. The seller will stay liable for tax debts until the takeover of the business.
Exceptions in case of family business takeover or when taking over the business of your employer
The takeover of a family business or the business of your employer goes the same as the takeover of any other business. But are you taking over the business due to a gift or inheritance (in Dutch)? Then you need to pay taxes over this and you need to notify the Tax Administration.
Are you taking over a business from your co-owner or employer? Then there are schemes (in Dutch) for the income tax and transfer tax.
Facts and figures: How many mergers and takeovers are there?
The graph below shows the number of mergers and takeovers per quarter.
Statistics: mergers and takeovers
Total mergers and takeovers